PPI – Are you one of millions of people owed thousands of pounds?

There’s been a lot of coverage in the news recently about ‘PPI’ (the English abbreviation for Payment Protection Insurance). It has been described as one of the biggest financial scandals in the UK history, but unlike some of the other recent scandals to make the news, this does not concern the super-rich but potentially anyone who has ever had a loan, credit card or mortgage, or has bought anything on credit.

According to Martin Lewis of Moneysavingexpert.com, the financial website, “it is not unfeasible that more than five million people are eligible.”  Meanwhile, The Times reported that 16.1 million policies have been sold since 1995, and of those that do make a claim for compensation, the average payout is £2,750.  Are you one of them?  If so, do not delay in claiming back what is rightfully yours…

What is Payment Protection Insurance?

Also described as ‘Accident, Sickness and Unemployment’, PPI was sold to cover loan, credit card and mortgage payments for customers who became unable to work or had lost their jobs.

That makes sense, so what’s wrong with it?

The way in which it was sold (or rather, mis-sold) meant that millions were unaware that they even had a policy, and so were paying thousands of pounds for cover that they did not agree to.  Millions of policies were also unsuitable for the people that bought them – because of terms and conditions that were not explained to them.  Another common example of mis-selling was customers being told that they had to take out PPI in order to get the loan or credit card they wanted (they didn’t…).

That sounds terrible, how long’s it been going on for?

The Times reported that 16.1 million policies have been sold since 1995.  Citizens Advice made a super complaint about how PPI was being mis-sold in 2005 and since then there has been a rapidly growing number of claims for compensation, and complaints to the Financial Ombudsman Service (FOS).  By 2009 the FOS was dealing with more than 800 complaints a week.  Latest reports say it is now receiving more than 5,000 every week.

How much could I claim back?

The Times reported that the average compensation is worth £2,750.  At Hamilton Brady, the single largest claim we have experienced is £35,000 on a mortgage PPI – that was one very happy customer!

How do I know if I have PPI?

Check through all your credit card or loan documents carefully.  If you cannot find them, you can request a copy from your lender for a fee of £10 using a Subject Access Request (SAR).  

I think I have PPI – how do I claim?

Contact your lender directly and make a clear written complaint.  They have 8 weeks to respond following which you can apply to the Financial Ombudsman – go to www.financial-ombudsman.org.uk.

Alternatively please contact Hamilton Brady who can manage your claim from beginning to end including the Subject Access Request – we do not charge you a fee until we have successfully completed your claim.

So why has this been in the news so much?

It’s a long story – are you sitting comfortably?  Since the super complaint by Citizens Advice in 2005, the banks have been heavily criticised in various reports by the Office of Fair Trading, the Financial Services Authority, the Financial Ombudsman Service, and the Competition Commission.  Yet they refused to admit they had done anything wrong and even continued to reject many legitimate complaints by dissatisfied customers.  This eventually led to the Financial Services Authority (FSA) issuing instructions to the banks in 2010 for them to improve the way they were handling complaints about PPI.  

In a move so brazen it left onlookers gasping for breath, the banks took the FSA to court in October 2010 to challenge these instructions.  They then used the court case as an excuse to stop paying out on complaints for seven months.

What happened in court?

Thankfully the judge threw out their claim.  This was announced to the public on 20th April 2011. The banks had until 10th May 2011 to appeal against the court decision.  Quite unbelievably (or not actually, if you’d been observing their behaviour to date), they were seriously contemplating doing so.  Then Lloyds TSB announced on 5th May that it was withdrawing from the legal action against the FSA.  This was followed by Barclays and eventually the British Banker’s Association confirmed on Monday 9th May that it would be dropping the legal action entirely.

So what does this mean for my PPI claim?

Your bank will now process it in due course according to the guidelines issued by the FSA.

Will I be getting my compensation soon?

Unfortunately, the legal action by the banks means that there is a massive backlog of complaints.  This is why you should submit your claim as soon as possible to get into the queue.

How big is this ‘massive’ backlog exactly?

No-one knows exactly but the Financial Ombudsman has received more than 200,000 complaints to date.  

To put it another way, Lloyds TSB alone has set aside more than £3 billion to pay off PPI compensation, and the total bill for the banks is reckoned to be more than £9 billion.

So it’s worth me checking to see if I have PPI then?

In a word, yes. Good luck and don’t let them get away with your money.  Contact us today at www.hamiltonbrady.co.uk for a free, no-obligation evaluation, and remember we do not charge a fee unless we have successfully completed your claim.

Tel: 0844 873 6081
E-mail: info@hamiltonbrady.co.uk
Address: Springfield House
Water Lane, Wilmslow, Cheshire, SK9 5BG.


Disclaimer: The above article is meant to be relied upon as an informative article and in no way constitutes legal advice. Information is offered for general information purposes only, based on the current law when the information was first displayed on this website.

You should always seek advice from an appropriately qualified solicitor on any specific legal enquiry. For legal advice regarding your case, please contact Hamilton Brady for a Consultation with a Solicitor on 0844 873 608.